Alibaba to buy out UCWeb in historic Internet merger

Reuters, BEIJING

Alibaba Group Holding Ltd (阿里巴巴) yesterday said it would buy all the remaining shares of mobile browser firm UCWeb (優視) in the biggest merger in Chinese Internet history, as the e-commerce giant steps up its spending spree ahead of its US listing.

Alibaba’s latest deal, hot on the heels of a string of investments that already total US$4.8 billion in the past six months, will be larger even than Baidu Inc’s (百度) US$1.9 billion acquisition of 91 Wireless Websoft Ltd (91無線網絡) last year, Alibaba said.

Alibaba’s investment in UCWeb shows the company’s determination to do more business on mobile in the world’s biggest smartphone market. However, rival Tencent Holdings Ltd (騰訊), China’s biggest listed Internet firm, dominates smartphone screens with its near-ubiquitous mobile messaging app WeChat, a situation that Alibaba executives have publicly railed against.

“This integration will create the biggest merger in the history of China’s Internet,” Alibaba said on its microblog.

Alibaba already held about a 66 percent stake in UCWeb, according to its initial public offering (IPO) filing last month.

Alibaba and UCWeb will form the UCWeb Mobile Business Group responsible for Internet browsers, location-based services, search services, mobile gaming platform, mobile application distribution and mobile literature services, UCWeb said in a statement.

UCWeb chief executive Yu Yongfu (俞永福) will serve as the business group’s chairman and become part of Alibaba’s “strategic decision-making committee,” Alibaba said.

Alibaba is preparing for a US IPO that could value the firm as high as US$150 billion, according to analyst estimates. Even so, the firm and its affiliates have splurged on investments totaling more than US$6.7 billion in the past six months alone.

The deal will mainly be done using Alibaba’s stock with a smaller part as cash, Alibaba said.

UCWeb said the mobile search service had a market share of more than 20 percent.

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